The winners and losers after government maintains anti-siphoning status quo

After months of consultation with media companies and sporting organisations, the Senate committee inquiry chaired by South Australian ALP Senator Karen Grogan endorsed the amendments as proposed by the government late last year with a few very minor adjustments.

In simple terms, once the bill inevitably passes it will mean the 30 year old anti-siphoning legislation introduced for the establishment of pay-television in Australia, highlighted by a list of sporting events that are offered to free-to-air television first, will effectively remain in play for the next five years despite rapidly changing technological advances.

It will also mean that streaming services hoping to break into the sports rights market will be treated the same as pay- television was 30 years back, with the legislation now also encompassing streamers like Kayo Sports, Optus Sport, Netflix and Amazon Prime.

WINNERS AND LOSERS

Sports

Sporting organisations are unquestionably the biggest losers from the senate recommendations, though they are not shocked by the outcome.

Sports have long argued that, like everywhere else in the world, they should have more autonomy to sell their broadcasting rights without anti-siphoning legislation that locks out pay and subscription television with major events and drives down competition.

As the NRL’s Misha Zelinsky told the Senate hearings “ … that limits the ability of our game to monetise the rights, and the inability to monetise the rights curtails the ability to invest in all elements of sport — elite, participation, grassroots, the women’s game etc.”

The recommendations uphold the status quo in that regard, yet go a step further in now treating streamers like Netflix in the same manner.

Streamers are just entering the US sports rights market with a financial bonanza predicted.

Australian sport now knows that it will not be replicated here for at least the next five years.

In addition all final series of the NRLW and AFLW and NRLW State of Origin matches have been added to the anti-siphoning list along with the Summer Paralympic Games, meaning less competitiveness for those rights.

Both Netball Australia and Foxtel have been particularly vocal about how adding more women’s events to the anti-siphoning list threatens to severely impede women's sports realising its commercial potential.

This possibility has moved the report to suggest that the “the Australian Government should provide additional support for emerging sporting codes, such as women’s and para sports, which may experience some impact as a result of the proposed reforms.”

What that support looks like is not articulated in any detail.

Similarly the report is a repudiation of the overarching view of major sports that was submitted to the senate by COMPPS (the industry body made up of Cricket Australia, NRL, AFL, Football Australia, Netball Australia and Tennis Australia), that “as the governing bodies of our respective sports, we are best placed to determine how our respective media rights are licensed (without the need for government intervention).”

The only minor win for sport is a six-month extension (to 12 months) in time able to negotiate with pay-TV or streamers when free-to-air television shows no interest in purchasing their events sitting on the anti-siphoning list, known as ‘delisting’.

Free to Air Television

The big winners are the established commercial networks and the ABC who will still be able to play on a lopsided playing field when acquiring sports rights to major events.

Just like pay television 30 years ago, they have seen off the streamers … for now.

Increasingly sport is the appointment viewing that keeps traditional television relevant, so to reduce competition and keep the price they have to pay for it down is a major boost.

Foxtel, Kayo Sports

What is seen on the screen by Kayo and Foxtel subscribers will not materially change.

Behind the scenes there will be a hint of frustration that again they have been locked out from purchasing exclusive rights to major events and an opportunity to reform and level the playing field has not occurred this time around.

It’s also confusing that the Kayo Freebies streaming product, which does provide free viewing of many sports, seems to have been disregarded in the report.

In another five years time they may have a more compelling argument.

Streamers like Netflix, Amazon Prime

Netflix recently jumped into sports entertainment by buying up US rights to WWE, US streamer Peacock bought a single NFL playoff game earlier this year and streamers are expected to play a major role in the next NBA rights negotiations that are about to heat up.

Clearly streaming sees sport as the future, and their financial clout means they will want the best sporting products and exclusivity.

The amendments were conceived to close what was seen as a loophole that allows streamers to buy exclusive rights in Australia, like what happened with Optus Sport and the FIFA Women’s World Cup.

However, locking streamers out of those big events through anti-siphoning legislation will cause them to think twice about whether Australian sport is worth investing in at all.

What will cause frustration for Australian sports administrators is that money can more easily be invested by streamers into their international competitors who are not encumbered by this kind of legislation.

Streamers are another loser, but it’s Australian sports that will miss that investment most.

Fans

Thirty years ago sports fans saw the legislation as welcome protection to continue watching the sports they love at no cost.

Certainly in the senate committee’s minds this is another win for fans in keeping more sport on free-to-air-TV.

However that black and white view may not wash with fans like it once did.

Increasingly consumers are preferring to stream due to the flexibility of viewing and devices, and the seemingly unlimited breadth of product that streaming can provide.

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The popularity is evident by the amount of households that now do not have an antenna for terrestrial television.

Whether fans see these anti-siphoning updates as a win, will come down to a question of cost v accessibility.

The hip pocket may hit fans in other ways given the changes are likely to result in less revenue for Australian sporting organisations to invest in grassroots programs and facilities.